A July 2020 IMF study looked at the pricing of worldwide exports and imports in dollars, euros, and other currencies since 1990. The dollar remains the prime currency used to price goods in global trade, even increasingly used for invoicing (as was also the euro) in spite of the decline in US and eurozone international trade, mostly due to the ever-increasing trade of China.
Studies of the Role of the Dollar in Country Imports and Exports
A 2018 Harvard economics report corroborates this: "the vast majority of invoicing is neither in the local currency or in the producer's currency but instead in a 'dominant currency', which is most often the U.S. dollar." Even other imperial ("developed") countries' trade takes place not in their own currencies, but mostly in dollars. Another Harvard study noted that while only 13% of Japan's imports come from the US, 71% of Japanese imports are priced in dollars, while only 33% of its exports are actually in Japanese yen. For the eurozone in 2018, 56% of the goods imported and 34% of good exported were calculated in dollars.
The Chinese renminbi (RMB), despite China being the world's number one trader with 12.4% of world trade in 2018, was used in a mere 2% of international payments. [3] The US, by contrast, is second largest with 11.5%, yet the dollar reigns as the world currency.
For Latin America, 97% of exports and 90% of imports are still made in dollars [4] - even while China's trade with Latin America has grown to half the size of US trade with the region.
The United States stands in sharp contrast to other nations, again showing the world power of the dollar. In 2015 93% of US imports were invoiced in the dollar, while 97% of its exports were.
2. Most Foreign Central Bank Holdings Are in the Dollar
Central banks worldwide hold a considerable portion of their reserves in dollars, using it as their primary reserve currency. As of 2019, foreign government central banks held $6.8 trillion in US dollar reserves, about 61% of combined central bank foreign exchange reserves of $11 trillion. Nearly two-thirds of the world's currency reserves are held in dollars, more than the combined holdings of all other currencies. The next closest reserve currency is the euro, which makes up 20% of known foreign central bank currency reserves. Japanese yen accounts for 5.7%, British pound 4.4%. Central banks held only 2% of their reserves in Chinese RMB, amounting to $221 billion worth of RMB.
The dollar's portion of these foreign reserves has remained relatively the same since 2009. The New York Times noted in 2019, "The dollar has in recent years amassed greater stature as the favored repository for global savings, the paramount refuge in times of crisis and the key form of exchange for commodities like oil."
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